Public Health and Health
Planning Council
Project # 142108-E
Long Island Jewish Medical Center
Program:
Purpose:
Hospital
Establishment
County:
Queens
Acknowledged: September 11, 2014
Executive Summary
Description
Long Island Jewish Medical Center (LIJMC), a 1,025bed not-for-profit acute care facility, requests approval
to become the operator of two hospitals through
mergers: Forest Hills Hospital, a 312 bed not-forprofit acute care facility in Queens County and
Franklin Hospital, a 305 bed not-for-profit acute care
facility in Nassau County. Franklin includes a
Residential Health Care Facility (RHCF) known as
North Shore-LIJ Orzac Center for Rehabilitation, a
120 bed RHCF also located in Nassau County. Both
hospitals will become divisions of LIJMC. The
Franklin Hospital Certified Home Health Agency is
not a part of this application, as it is being closed and
the license transferred to another entity under CON
142068.
LIJMC expects that the proposed mergers with
Forest Hills and Franklin hospitals will result in
savings and efficiencies that will enable the two
facilities to remain financially viable and to serve
their communities more effectively. Expected
benefits include;
Cost Savings
 Reduction in management and administrative
costs due to right sizing span of control.
 Improved utilization of resources through
standardization of processes across the hospitals
and elimination of duplicative costs.
 Integration into a single EMR, as well as a single
registration and scheduling system, resulting in
several back‐end efficiencies in managing IT
systems for three separate hospitals.
provided in this region.



Ensure flexibility in delivering the most
appropriate level of care to patients within the
North Shore – LIJ Health System’s Queens and
Southwest Nassau regions.
Streamline administrative oversight resulting in a
positive impact to the communities served as
measured through quality, efficiency, and patient
experience scores.
A single integrated medical staff across the
campuses will improve the timeliness of provider
communication, increase the integration of best
clinical practices, and provide greater ability for
physicians to refer and follow patients across the
care continuum, regardless of which facility
patients choose.
North Shore Long Island Jewish Health Care, Inc. is the
active parent/co-operator of LIJMC. Franklin and Forest
Hills are already members of the North Shore-Long
Island Jewish Health System, Inc. (NS-LIJ), a
comprehensive integrated delivery system formed to
ensure the delivery of a broad range of quality
healthcare services to the communities it serves and to
achieve economies of scale through consolidation,
cooperation and joint planning among its members.
Also, the Hospitals are members of the NS-LIJ
Obligated Group, formed to provide its members an
enhanced credit position and expanded access to
capital markets
OPCHSM Recommendation
Contingent Approval
Additional Benefits
 Facilitate the coordination and the quality of care
Project #142108-E Exhibit Page 1
Need Summary
This project will not change utilization, services, or
beds in any of the involved facilities. They will continue
to operate but as different campuses of a single article
28 facility operated by Long Island Jewish Medical
Center.
There is no anticipated change in utilization rates due
to this project.
character and competence or standing in the
community.
Financial Summary
There are no project costs associated with this
application.
Budget:
Revenues:
Expenses:
Gain(Loss):
$1,654,476,100
$1,647,440,500
$7,035,600
It appears that the applicant has demonstrated the
capability to proceed in a financially feasible manner.
Program Summary
Based on the information reviewed, staff found nothing
that would reflect adversely upon the applicants’
Project #142108-E Exhibit Page 2
Recommendations
Health Systems Agency
There will be no HSA recommendation for this project.
Office of Primary Care and Health Systems Management
Approval contingent upon:
1. Submission of documentation of approval by the Office of Mental Health. [PMU]
2. Submission of the executed Certificate of Merger of Forest Hills Hospital into Long Island Jewish
Medical Center, acceptable to the Department. [CSL]
3. Submission of the executed Agreement of Merger between Forest Hills Hospital and Long Island
Jewish Medical Center, acceptable to the Department. [CSL]
4. Submission of the executed Certificate of Merger of Franklin Hospital into Long Island Jewish Medical
Center, acceptable to the Department. [CSL]
5. Submission of the executed Agreement of Merger between Franklin Hospital and Long Island Jewish
Medical Center, acceptable to the Department. [CSL]
6. Submission of an executed amendment to the Certificate of Incorporation of Long Island Jewish
Medical Center, acceptable to the Department. [CSL]
7. Submission of executed Certificates of Assumed Name of Long Island Jewish Medical Center,
acceptable to the Department. [CSL]
Approval conditional upon:
1. The project must be completed within three years from the date of the Public Health and Health
Planning Council recommendation letter. Failure to complete the project within the prescribed time
shall constitute an abandonment of the application by the applicant and an expiration of the approval.
[PMU]
Council Action Date
December 4, 2014
Project #142108-E Exhibit Page 3
Need Analysis
Background
Long Island Jewish Medical Center (LIJMC) is seeking approval to acquire through mergers two
hospitals, which will become division of LIJMC. LIJMC is a 1,025-bed hospital located at 270-05 76th Ave,
New Hyde Park, 11040, in Queens County. The two facilities to be acquired are Forest Hills Hospital, a
312 bed hospital at 102-01 66th Road, Forest Hills, 11375, in Queens County and Franklin Hospital, a 305
bed hospital located at 900 Franklin Ave, Valley Stream, 11580, in Nassau County. There would be no
change in beds and services at these facilities as a result of this CON. Franklin Hospital includes a
Residential Health Care Facility, the North Shore-LIJ Orzac Center for Rehabilitation, a 120 bed nursing
home located at 900 Franklin Ave, Valley Stream 11580.
Analysis
The average Medicaid admission rate for residential healthcare facilities in Nassau County was 18.7% in
2012. The average occupancy rate for Nassau County in that year was 92.6%. Utilization and Medicaid
admission rates for the Orzac Center for Rehabilitation are given below.
Table 1: Orzac Center for Rehabilitation Usage and
Admission Statistics
Year
2010
2011
2012
Medicaid
Admission Rate
6.1%
7.4%
4.9%
Occupancy
Rate
95.6%
96.2%
96.6%
This facility has Medicaid admission rates lower than the 75% of county-average Department standard; It
is expected that the applicant will implement measures to increase Medicaid admissions going forward.
The bed charts for the involved hospitals are provided below. There will be no changes in bed counts
upon completion of this project.
Table 2: Long Island Jewish Medical Center Bed Chart
Bed Category
Bone Marrow Transplant
Certified Beds
Requested
Action
Certified Capacity
Upon Completion
4
0
4
Coronary Care
10
0
10
Intensive Care
62
0
62
Maternity
76
0
76
435
0
435
Medical / Surgical
Neonatal Continuing Care
4
0
4
Neonatal Intensive Care
24
0
24
Neonatal Intermediate Care
29
0
29
108
0
108
37
0
37
236
0
236
1025
0
1025
Pediatric
Pediatric ICU
Psychiatric
Total
Project #142108-E Exhibit Page 4
Table 3: Forest Hills Hospital Bed Chart
Requested
Action
Bed Category
Certified Beds
Intensive Care
28
0
Maternity
Certified Capacity
Upon Completion
28
20
0
20
251
0
251
Neonatal Continuing Care
9
0
9
Neonatal Intermediate Care
1
0
1
Pediatric
3
0
3
312
0
312
Medical / Surgical
Total
Table 4: Franklin Hospital Bed Chart
Requested
Action
Certified Capacity
Upon Completion
Bed Category
Certified Beds
Coronary Care
8
0
8
Intensive Care
8
0
8
248
0
248
Pediatric
20
0
20
Psychiatric
21
0
21
305
0
305
Medical / Surgical
Total
Conclusion
This project will have no impact on patient access to healthcare or utilization rates. It should improve
efficiencies and allow the organizations involved to more effectively deliver their services to the
communities they serve in Nassau and Queens Counties.
Recommendation
From a need perspective, approval is recommended.
Program Analysis
Project Proposal
Long Island Jewish Medical Center (LIJMC) seeks approval to acquire through mergers Forest Hills
Hospital and Franklin Hospital and certify them as divisions of LIJMC. Franklin Hospital includes a
Residential Health Care Facility known as the North Shore-LIJ Orzac Center for Rehabilitation. There are
no anticipated changes to hospital services provided. [Of note, the Franklin Hospital Certified Home Health
Agency (PFI 3032) is being closed and the license transferred to another entity (under CON 142068) and
is not part this application.]
Combining these hospitals into a single Article 28 facility will result in a single integrated medical staff across
campuses that is likely to contribute to improvements in timeliness of provider communication and the
sharing best practices. Further, it will provide physicians the ability to refer and follow patients across the
care continuum-- regardless of which facility they chose to receive services. In time, the three facilities will
integrate into a single EMR as well as a single registrations/scheduling system. Streamlined administrative
oversight should contribute to a more financially stable framework through operational effectiveness and
efficiencies.
Project #142108-E Exhibit Page 5
A full Character and Competence Review was conducted on all members of the Long Island Jewish Medical
Center board and disclosures were made as part of project CON #141004 which was approved by PHHPC
in June 2014.
In conducting the aforementioned Character and Competence Review, staff from the Division of
Certification & Surveillance reviewed the disclosure information submitted regarding licenses held, formal
education, training in pertinent health and/or related areas, employment history, a record of legal actions,
and a disclosure of the applicant’s ownership interest in other health care facilities. Licensed individuals
were checked against the Office of Medicaid Management, the Office of Professional Medical Conduct, and
the Education Department databases as well as the US Department of Health and Human Services Office
of the Inspector General Medicare exclusion database.
Additionally, the staff from the Division of Certification & Surveillance reviewed the ten-year surveillance
history of all associated facilities. Sources of information included the files, records, and reports found in
the Department of Health. Included in the review were the results of any incident and/or complaint
investigations, independent professional reviews, and/or comprehensive/focused inspections. The review
found that any citations were properly corrected with appropriate remedial action.
Recommendation
From a programmatic perspective, approval is recommended.
Financial Analysis
Operating Budget
The applicant has submitted an operating budget, in 2014 dollars, for the first and third years, which are
summarized below:
Inpatient and Outpatient
Total Net Patient Revenue
Other Operating Revenue*
Total Revenue
Expense:
Operating
Interest
Depreciation
Total Expense
Excess Revenue(Loss)
Inpatient Discharges
Visits
Year One and Three
$1,556,640,300
97,835,800
$1,654,476,100
$1,533,762,700
37,433,800
76,244,000
$1,647,440,500
$7,035,600
83,197
524,857
*Other Operating Revenues are made up of physician practice revenues, net assets released from
restrictions which are donations that offset operating expenses, capitation and grant revenues,
distributions from the hemophilia consortium and cafeteria revenue.
Project #142108-E Exhibit Page 6
Utilization by payor source, for the first and third years, is projected as follows:
Inpatient
Commercial Managed Care
Medicare-Fee-For-Service
Medicare Managed Care
Medicaid Managed Care
Private Pay
Outpatient
Commercial Managed Care
Medicare-Fee-For-Service
Medicare Managed Care
Medicaid Managed Care
Private Pay
Year One and Three
35.2%
20.5%
12.9%
27.4%
4.0%
Year One and Three
33.3%
19.8%
6.2%
31.7%
9.0%
Expenses and utilization assumptions are based on the combined historical operations of LIJMC, Franklin
Hospital and Forest Hill Hospital, as well as market trends. Projected revenues and expenses exclude the
Orzac Center for Rehabilitation, off-site CFAM ambulatory surgery and cancer clinics, home care and
medical groups.
Capability and Feasibility
There are no project costs for this application.
The submitted budget projects a net profit for the first and third years of $7,035,600. Management
continues to focus on various initiatives such as revenue cycle improvement, supply chain savings
and productivity and efficiency initiatives to counteract programmatic losses. Revenues are based on
prevailing payment methodologies and current payment rates. The budget appears reasonable.
As shown on BFA Attachments B and C, for the year ending December 31, 2013, and the six-months
ended June 30, 2014, LIJMC has maintained positive working capital, net asset position, and experienced
net operating loss of $2,987,000 and a net operating income of $27,935,000, respectively. LIJMC’s net
loss in 2013 is due to the inclusion of the full value of certain paid time off and third party liabilities that
may be resolved and paid in more than a one year period.
As shown within BFA Attachments B and C, for the year ending December 31, 2013, and the six-months
ended June 30, 2014, Forest Hills and Franklin experienced negative working capital and net assets.
Forest Hills had maintained positive net operating income of $8,418,000 and $6,006,000, respectively,
and Franklin has experienced a $3,036,000 net operating loss for the year ending December 31, 2013,
and maintained a $732,000 net operating profit as of June 30, 2014.
Management is continually working to improve net assets by managing operating expenses and investing
in the facility’s programs to enhance capacity. This includes:


Strategic program growth and physician recruitment to improve volume,
Managing overtime utilization and flexing staff levels in conjunction with volume.
Based on the preceding, it appears that the applicant has demonstrated the capability to proceed in a
financially feasible manner; approval is recommended.
Recommendation
From a financial perspective, approval is recommended.
Project #142108-E Exhibit Page 7
Attachments
BFA Attachment A
BFA Attachment B
BFA Attachment C
BFA Attachment D
Organization Chart- Current and Proposed
2013 Financial Summary for North Shore-Long Island Jewish
System Inc. and Obligated Group
June 30, 2014 Financial Summary for North Shore-Long Island
Jewish System Inc. and Obligated Group
Pro Forma Balance Sheet- Long Island Jewish Medical Center
Project #142108-E Exhibit Page 8